Employees are the lifeblood of every construction company. Without loyal employees, materials do not get purchased, contractors do not get hired, and buildings do not get built. We also keep hearing that we are experiencing a shortage of skilled trade workers. However, I believe this shortage is not because there are fewer workers, but an overall increase in the volume of construction projects.
Looking at the following chart for non-residential construction spending, you’ll see that spending of private money (non-government projects) is about $60 billion more than the previous peak in 2008-2009.
Looking at the number of construction workers for the same time period shows that there were actually the same number of construction workers in 2018.
To recap the comparison between 2008 & 2018:
No wonder it feels like we’re experiencing a Construction Labor Shortage!
So, how does the small to mid-size contractor deal with these conditions? You can’t just hire your way out of this problem; there’s not many people looking for work these days.
One of the best strategies for this situation is to build employee loyalty. Typically, employers do just enough to keep the majority of their employees happy. They pay competitive wages, offer decent benefits, and give positive reinforcement.
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Here are the results of that type of strategy:
– Bain & Company
– Columbia University
Because the cost of replacing employees is so high, and the fact that so many continue to leave, companies who can develop a better strategy for employee satisfaction and retention are going to perform better than their competition.
Research shows that emotionally connected employees are the best employees because they are engaged and productive, and they feel validated and appreciated. As an employer, you need to understand how to emotionally and financially connect your employees to your business. This goes beyond salaries, training, or benefits.
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Here are a few strategies that have been proven to connect employees to the performance of their jobs, as well as the company’s performance.
I have personally quit positions due to disagreements with supervisors and feeling like my contributions were not being listened too, but can’t think of a time when I left for purely financial reasons. Conversely, I have turned down positions that offered an increase in compensation but would have had me working on projects I wasn’t interested in, or for people with management styles (or company philosophies) that didn’t agree with me.
What other strategies have you used to build employee loyalty? We’d love to hear your thoughts and feedback!
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Ascent Consulting’s mission is to Build Better Construction Companies.
We are committed to delivering impressive results in the areas of
profitability, performance and growth.
Ascent's founder and president, Adam Cooper has over three decades of experience in construction business ownership, sales & marketing, project management, construction technology, company operations and leadership.